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Part 1

LatAm Overview

In recent years, a slowdown in Latin American economic growth has been seen in countries such as Brazil, Mexico and Argentina; Chile, Colombia and Peru have enjoyed relatively stable growth, yet still experienced a slight decrease. Although personal consumption has risen in most countries – as a result of increased credit and employment rates – several other factors have contributed to this slowdown.

The global crisis is one of these factors; a combination of the European recession, decrease in demand (mainly from China), a slow recovery by the United States and lower export prices – all of which have contributed to the instability of financial markets. And there are other important issues, like the region’s increasing current account deficit, the difficulty of accessing formal employment and the differences among the peoples’ civil and political rights. This last issue is illustrated by the Social Inclusion index developed by Americas Quarterly Organization, where social inclusion consists of an institutional, social-political and attitudinal environment that goes beyond economy, poverty and inequality reduction. The index analyzes 15 indicators, such as GDP growth, investment in social programs, political and civil rights, and financial inclusion and ranks each of the 11 countries relative to each other (1 -11); these scores are then converted into a scale of 1 -100. For the countries that feature in this report, the Social Inclusion Index scores are: Chile 68.4, Brazil 53.5, Colombia 48.4, Mexico 45.2 and Peru 27.9. Just to compare, the United States score is 64.6. (The index doesn’t include Argentina.)

However, there were gains and growth in some Latin American countries, both in macroeconomic policy and in civil and political rights. In Brazil and Chile, high levels of social mobilization put a lot of pressure on the government to pay more attention to social issues.

The best example of this social mobilization came in this summer’s protests in Brazil, seen all over the world. The first big demonstration, held simultaneously in various Brazilian cities, was a response to an increase of R$0.20 in bus fares. Widespread, organized and spread via the Internet, these demonstrations forced Governors and Mayors to give a swift response to the Brazilian people. A week later, all fares were returned to the previous prices. Other demands followed this first challenge, namely improvements to health, education, security and the fight against corruption. The giant had awakened.

Yet, despite such bold changes, some Latin American countries are still experiencing very strong political interventionism – Venezuela, Argentina, Ecuador and Bolivia, for example. A sharp reminder of just how complex and diverse Latin America’s development is and will continue to be.

The Headline News

Despite the global crisis and other factors that have negatively impacted upon the Latin American economy (such as inflation, exchange rates, and a fall in commodity prices), in 2013 the total value of brands in the BrandZTM Top 50 Most Valuable Latin American Brand Ranking 2013 added up to US$ 135.3 billion, not far off 2012’s value of US$ 135.7 billion. This relatively sustained value shows the strength and resilience of leading Latin American brands.

Change at the top

The most important change seen in the BrandZ™ Latam Top 50 ranking was the segment shift in the number one spot. Last year, the oil sector headed the list; this year we see a beer brand at the top, Corona. Its success is not isolated, several beer, bakery, food & personal care brands have increased their value and in fact, there are three brands from the category in the Top 10, all of them beers – significantly changing the face of the ranking.

In 2012, Petrobras, the Brazilian oil company owned by the government, held the number one spot. This suffered a big drop in brand value (from US$ 10.6 billion in 2012 to US$ 5.8 billion in 2013, a decrease of 45%) mainly due to devaluation of the commodity in the international markets – which also affected other companies in the oil & mining sectors.

The Top 5 positions in 2012 comprised the B2B, services and financial segments; in 2013, the top positions are dominated by beer, bakery, food & personal care, services and B2B, followed closely by retail.

A Good Year For Beer

The most valuable brand this year is the above- mentioned Mexican beer Corona (US$ 6.6 billion) with a 29% growth – a brand that enjoys a solid positioning and is highly regarded by consumers, not only in Mexico, but also overseas.

The runner-up in the BrandZ™ Latam Top 50 2013 ranking is another Mexican brand: Telcel. Its brand value adds up to US$ 6.6 billion, a 22% decrease when compared to 2012. Like Telcel, quite a few brands have lost value this year but other brands in the alcoholic beverages segments compensate for that loss: Skol, Brahma, Antarctica and Bohemia (Brazilian beers) have all significantly increased their brand value. Modelo, another Mexican beer brand, has also improved considerably.

Newcomers And Growing Segments

In the beer sub-segment Águila and Poker (Colombia), and Crystal (Peru) make their debut in the BrandZTM Latam Top 50. Financial is another segment which saw three new entrants: BCP, Interbank (both Peru), and Banorte (Mexico). Retail also welcomed a newcomer, Soriana (Mexico).

Other segments such as bakery, cement, food, retail and cosmetics also performed positively, growing by 49%, 36%, 35%, 13% and 12%, respectively.